LG Q2 profits feel the brunt of COVID-19

LG Electronics' operating profit for the second quarter dropped slightly over 24% from a year prior due to the global pandemic.
Written by Cho Mu-Hyun, Contributing Writer

LG Electronics has posted 495.4 billion won in operating profit and sales of 12.8 trillion won for the second quarter of 2020.

It is a drop of around 24% and almost 18%, respectively, from a year prior. LG said its results were affected significantly by the worldwide impact of the COVID-19 pandemic.

LG's home appliance business, its main profit contributor, posted operating profit of 628 billion won, down 12.5% from a year prior. The company stressed, however, that the margin rate for the business during the second quarter was 12.2% thanks to strong sales from its premium products and cost-cutting efforts.

The TV business saw operating profit decline almost 26% year on year by earning 112.8 billion won. Profitability and revenue was impacted by lockdown measures, including store closures, but the business will reduce costs and control marketing expenses going forward to bring profitability back to last year's levels, LG said. 

Demand for TVs is expected to recover in the third quarter, with LG saying it would push its OLED TVs accordingly.

The mobile business, meanwhile, posted yet another operating loss of 206.5 billion won, marking 21 consecutive quarters of loss. The loss was smaller compared to the previous quarter and the year prior, the South Korean company stressed, saying it has plans to launch new "attractively-priced models" to create momentum. 

The LG Velvet smartphone will also be launched in more countries in the third quarter, the company added.

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